2011 proved to be another rewarding but challenging year for the City of Homer. The fiscal challenges included continued economic stagnation, uncertainty about future revenues, and a widespread antipathy toward taxes, fees, and government generally. Despite this, the City government remains in a fiscally sound and stable position. According to the FY 2011 Audit, the City has increased the fund balance in the General Fund by $1,154,032 from 5,573,814 to $6,727,846. Revenues exceeded budget projections by $976,434. This was primarily due to an increase in tax revenues ($516,183) and increases in Revenue Sharing and the Jail Contract. The excess of revenues over expenditures was $ 1,174,786. A library construction loan whose principle is about $1,200,000 is the only outstanding General Fund debt. Total General Fund Assets at the end of FY 2011 were $104,724,642 and total liabilities were $18,049,466. Although the General Fund is stable and operating in the black, the cumulative effects of continued unfunded and vacant positions, deferment of equipment and infrastructure repair and replacement, and revenue declines associated with the sales tax exemption for food are becoming apparent. The City has been successful in obtaining funding for capital projects however, the revenues for maintaining this expanding infrastructure are lagging behind.
The Port and Harbor Enterprise Fund is operating in the black in the sense that real operating expenses, including a transfer into depreciation accounts, did not exceed revenues. Operating revenues in FY 2011 were $3,563,431 and operating expenses were slightly less. For the purpose of the audited financial statement, the auditors have determined that the depreciation expense should be $1,488,909, which is approximately a million dollars more than was actually transferred. Therefore, on paper, the fund had a deficit of $1,032,049 in FY 2011. Total Fund assets were $42,056,910 and liabilities were $1,347,262. The political pressure to keep fees down at the Port and Harbor has resulted in a backlog of maintenance, repair, and replacement projects. The depreciation reserves are far less than optimal considering the assets the Fund is responsible for. In 2011 a special Port and Harbor Improvement Committee was appointed by the City Council to discuss ways to finance the backlog of maintenance and repair projects. The Port and Harbor serves as an important regional economic engine and the staff do an excellent job providing services to the public. We look forward to making new investments there in the next few years.
The City of Homer strives to be as efficient, productive, and responsive to the needs of its residents as possible. The City staff continue to look for ways to operate more efficiently and to do more with less. I am proud of the work, the professionalism, and the high level of service that is provided to the public by all City departments. The Library, the Port and Harbor, Public Works, Police, Fire, Finance, Planning, the Clerk’s Office, and Community Recreation all had major achievements and successes in 2011. The City’s overall success in 2011 was due in large part to the diligence and hard work of the Mayor, the City Council, the Boards and Commissions, citizen volunteers, and dedicated public employees. I believe that a review of this year’s annual report will confirm that the City government is functioning at a high level, that its fiscal policies are sound, and that Homer continues to be a very attractive place to live and conduct business. I believe the future for Homer continues to be bright.